Brown Corporation Makes Four Products in a Single Facility

question 78

Multiple Choice

Brown Corporation makes four products in a single facility.These products have the following unit product costs: Additional data concerning these products are listed below. The grinding machines are potentially the constraint in the production facility.A total of 10, 500 minutes are available per month on these machines. Direct labor is a variable cost in this company.
Which product makes the LEAST profitable use of the grinding machines?

• A)Product A
• B)Product B
• C)Product C
• D)Product D

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Definitions:

Total Fixed Costs

The sum of all costs required to produce any amount of a product or service that does not change with the level of production output.

Corporate Taxes

Taxes imposed on the income or profit of corporations, influencing their financial strategies and profitability.

EBIT

Stands for Earnings Before Interest and Taxes; it's a financial metric that calculates a company's profitability by excluding interest and income tax expenses.

Debt

Money that is owed or due to be paid to someone else, often as a result of borrowing funds or purchasing goods and services on credit.